Abstract
The oil and gas industry is considered one of the largest economic drivers in the world. This industry is responsible for the employment of millions of people and revenues of billions of dollars. These facts indicate the importance of this industry and its impact on the world. Oil and gas projects, especially unconventional ones, encounter a great deal of obstacles that organizations and companies are not willing to face alone. Joint ventures can, therefore, be utilized to execute projects and overcome these problems; and, joint ventures have become a crucial part of oil and gas industry.
Joint ventures, however, are complex and contain many risks that can result in their failure. Assessing major risk factors that can impact the success of a joint venture before entering into a deal would allow organizations and companies to make informed decisions. The main objective of the study; therefore, was the development of a framework that supports oil and gas companies in making decisions to successfully executive joint venture projects by evaluating the involved strategic risk factors. Joint ventures in the oil and gas industry were examined, joint venture success measures were established, and the risk factors that affect the likelihood of joint venture success were investigated. As a result, a tool has been developed that can help participants evaluate a potential joint venture.
This research followed a robust research approach which consisted of both qualitative and quantitative methods. Many steps were involved in the research methodology, including a pilot study, document examination, interviews, questionnaires and analysis. These steps were done to obtain more information regarding the risks and their implications upon entering into joint venture deals.
As a result, two success measures were established and verified: 1) financial measures and 2) a sustainability measure. The statistics extraction method then was used to generate three major risk components from 23 risk factors: 1) joint venture boundary, 2) governance and management, and 3) external issues. These outcomes and their relationships were utilized to develop the final model.
